Value Added in Motion: Determinants of Value Added Location within the EU

39 Pages Posted: 2 Oct 2017

See all articles by Lionel Gérard Fontagné

Lionel Gérard Fontagné

Banque de France; CEPII; University of Paris 1 Panthéon Sorbonne; Paris School of Economics

Gianluca Santoni

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Date Written: January 2017

Abstract

In this paper we approach the determinants of value added location across European countries, from the recent developments to the 2035 horizon. In the first part of the paper, using detailed trade data, we show how competitiveness, demand and export composition have shaped the market shares of European countries, hence the location of production in Europe. Variance and covariance analysis point to the specificity of two countries: the overall market share development seems to be significantly affected by aggregate demand conditions in Germany and Italy. We then turn to trade in value added and observe that bigger countries tend to report a higher share of domestic value added because they can count on more efficient national value chains or a higher diversity of goods upstream. Interestingly, such evidence does not apply to Germany, or Poland, which exhibit a more dynamic insertion in international value chains. In the second part of the paper, we present the main prospects for the allocation of labour (i.e. migration), value added and the macro-economic effects of energy prices across European countries up to year 2035. The projections presented in the paper aim to summarize the main results obtained by other researchers within the "Value Added in Motion (VAM)" project.

Keywords: Export Competitiveness, Trade Performance, Trade Patterns after the Global Crisis

JEL Classification: F10, F14, F40, C43

Suggested Citation

Fontagné, Lionel and Santoni, Gianluca, Value Added in Motion: Determinants of Value Added Location within the EU (January 2017). Centro Studi Luca d'Agliano Development Studies Working Paper No. 424, Available at SSRN: https://ssrn.com/abstract=3044518 or http://dx.doi.org/10.2139/ssrn.3044518

Lionel Fontagné (Contact Author)

Banque de France ( email )

Paris
France

HOME PAGE: http://www.lionel-fontagne.eu/

CEPII ( email )

9 Rue Georges Pitard
Paris, 75015
France
+33 1 53 68 55 06 (Phone)

HOME PAGE: http://lionelfontagne.weebly.com/

University of Paris 1 Panthéon Sorbonne ( email )

Maison des Sciences Economiques
106-112 Bd de l'Hôpital
Paris, 75013
France
+33 1 44 07 89 94 (Phone)
+33 1 53 68 55 01 (Fax)

HOME PAGE: http://lionelfontagne.weebly.com/

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France
+33 1 44 07 89 94 (Phone)

HOME PAGE: http://lionelfontagne.weebly.com/

Gianluca Santoni

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

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